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CEO Pay Bashing, Tea Party Style
Has Jim DeMint, the right-wing senator leading the assault on federal domestic spending, finally gone too far? His corporate executive benefactors may soon come to think so.
Even hypocrites can sometimes have a point. Take Jim DeMint, for instance, the U.S. senator--and tea party favorite--from South Carolina.
Earlier this month, DeMint came out swinging against the defenders of federal funding for public broadcasting.
How dare the top execs at public TV and radio take our tax dollars, DeMint roared. These muckety-mucks, he charged, "are making more than the president of the United States."
That's true. The PBS president takes home $632,233 in annual compensation, while her counterpart at NPR came home with $1.2 million in 2009. President Barack Obama only earns $400,000.
If public broadcasting can afford to shell out executive paychecks like these, DeMint declares, "surely it can operate without tax dollars."
So what makes DeMint a hypocrite here? If the good GOP senator really believed that enterprises with lavishly paid executives can afford to do without taxpayer support, he wouldn't be wasting his time ranting against public broadcasting. He'd be raging instead at Big Oil--or Corporate America writ large.
In 2009, CEOs at America's energy giants averaged a haul of $10.4 million each. These same executives happily accepted billions in U.S. taxpayer largesse.
Most of this largesse to Big Oil comes in the form of tax breaks. Budget experts, notes a new Tax Foundation report, consider these tax breaks "the equivalent of spending through the tax code."
How much do U.S. taxpayers spend on Big Oil? The Tax Foundation has identified $5.8 billion in targeted tax breaks set to go to oil and gas companies over the next five years.
These companies also benefit from various other tax breaks not specific to energy. Over the next five years, the Tax Foundation reports, these general-purpose corporate tax breaks will cost taxpayers $448.5 billion.
The combined outlay for targeted and general-purpose corporate tax breaks: over $100 billion annually.
Last year's taxpayer outlay for public broadcasting: $420 million, less than 1 percent of what goes to private corporations.
America's top private corporations all pay their CEOs millions more than what the President gets. If these corporations can afford to pay top execs more than the President, then--by Jim DeMint's public broadcasting logic--they should be able to operate without our tax dollars.
Senator DeMint, predictably, isn't making this logical leap. He's confining his "outrage" to public broadcasting. That makes him a hypocrite. But DeMint's original point, that our tax dollars shouldn't be subsidizing excessive executive pay, remains a good one.
The president of the United States currently earns about 25 times more than the lowest-paid federal worker. What if we denied tax dollars to all enterprises that pay top executives over 25 times worker pay? What would happen then?
Public broadcasting enterprises would no doubt quickly reduce executive pay. Not too long ago, these enterprises operated with top-to-bottom pay ratios well under 25:1.
Not that terribly long ago, back in the 1960s, most U.S. private corporations also operated within--or near--that 25:1 benchmark. Our contemporary corporate pay gap is 263-to-1.
The gap between corporate executive and worker pay has, in short, essentially multiplied tenfold over a single generation.
Has the value of CEO labor, over that time span, increased ten times faster than the value of the labor average workers perform? Of course not. Yet our tax dollars are still feathering, year after year, America's cushiest corporate executive nests.
Senator DeMint can see "no reason" why taxpayers should "subsidize" overpaid public broadcasting executives. What reason can he suggest, we can all wonder, for having taxpayers continue to subsidize the far more lavish compensation of Corporate America's finest?